UK game developers push for tax level playing field

UK video games developers are piling on the pressure for tax breaks to enable them to compete better with foreign rivals.

The lobbying group Games Up has attracted 15 video games developers including big hitters like Electronic Arts, Take Two Interactive and Ubisoft, reports The Financial Times. This is despite the fact some of these companies have been lured to Canada by tax rebates and grants from the Montreal government.

Richard Wilson, chief executive of the UK trade association for games developers, Tiga, said that last week the US state of Georgia approved legislation granting tax credits of up to 30% for entertainment productions, such as films and games.
He added that this was ‘emblematic of the increasingly unfair competition that the UK games industry faces’.

He said the success of Canada’s progressive tax scheme for developers helped its games production industry overtake the UK’s as the world’s third largest in 2006, and South Korea is now not far behind.

The games market was worth £16bn in 2007, according to Tiga, while UK-made games generated £4bn globally from £1.4bn in inward investment between 2006 and 2008.

Games Investor Consulting figures suggested if Tiga’s proposals on skills and tax credits were adopted, the UK games industry would receive extra investment of £220m over five years, creating an additional 1,500 jobs.